Why You Need Umbrella Insurance - YouTube

You may have heard

the term umbrella insurance

and like many people,

you may be confused about just what it is and how it works.

That's precisely why we've created this video.

We want to make it easy for you to understand

your insurance options.

This way you can make informed decisions

when deciding on the coverages for you and your family.

Let's face it, lawsuits are quite common today.

If you accidentally injure someone or damage their property,

you could be sued and find yourself in litigation.

More commonly juries are awarding large verdicts.

So while your homeowners, property and auto policies

may provide substantial liability limits,

juries can award sums that exceed those limits.

You would be personally responsible for the amounts

that exceed your policy limits.

That's where umbrella insurance comes in.

The following is one of the many examples

where having high limits of liability coverage

might not be enough.

Imagine you were involved in a four car accident,

which is considered to be your fault.

You are uninjured,

but all three of the other cars are considered total losses

and each car had one person that sustained injuries.

Now let's take a look at how your coverage would apply.

Let's assume your current auto insurance

provides bodily injury coverage of $250,000 per person,

$500,000 per accident.

And the property damage limits are $100,000 per accident.

On the surface,

that sounds like it should be enough coverage and it may be.

But until you look at the details of your coverage

and the potential cost of damages

associated in an accident like this,

you cannot be so sure.

For this example,

let's further assume car one had an injured driver.

That requires $200,000 for bodily injury

and $40,000 of property damage to replace the car.

Car two requires $200,000 for bodily injury

and another $40,000 for replacing that vehicle.

And the third car requires $300,000 for bodily injury

and $50,000 to replace the luxury vehicle.

Add it all up and you are looking at a total settlement

of $700,000 for the bodily injury

and $130,000 for the damage to the cars involved.

After reviewing your current liability limits,

you will see that your insurance coverage

would pay up to $500,000

towards the bodily injury claims

as well as the $100,000 towards the property damages.

You on the other hand

may be responsible for the additional $200,000

for bodily injury,

as well as the $30,000 for property damage,

which means your current assets

and even your future earnings could be in jeopardy

as you may be forced to make up the difference of $230,000.

This is why we recommend considering an umbrella policy.

Now let's consider the same situation,

but now you have

a $1 million umbrella liability policy in place.

From our example,

you'll recall that the total settlement costs were $700,000

for bodily injury and $130,000 for property damage.

And that your insurance coverage paid for the $500,000

towards bodily injury and $100,000 towards property damage.

The remaining $200,000

that would have been your responsibility

would now be covered by your $1 million umbrella policy.

This is exactly what an umbrella policy is meant to do.

It helps to protect current income,

future income and assets against lawsuits

by providing additional liability coverage

in excess of your existing policies.

One of the best features of an umbrella policy

is that it provides coverage

on top of your existing policies.

So for example,

if someone slipped and fell on your driveway

and wanted to sue you,

the umbrella policy would kick in after your underlining

homeowners policy limit was exhausted.

If you are responsible for damages caused by an accident

while on your boat or while operating your RV again,

your umbrella policy would provide the excess coverage.

You may be surprised just how inexpensive

this type of policy is.

In most cases,

you would pay less than a dollar a day.

For these reasons, personal umbrella liability insurance

is widely considered one of the best values for the money

when you compare the cost of the protection it provides.

Our hope is this video has cleared up any misconceptions

you may have had regarding umbrella insurance

and to help you understand the value it provides.

Contact us today so that we can help you

make an informed decision

when deciding on your insurance needs.